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China to invest $100 billion in India over 5 years

Sep 13, 2014 12:00 AM

Chinese president Xi Jinping will bring along with him $100 billion or Rs 6 lakh crore of investment commitments over five years during his upcoming India visit next week. This is nearly thrice the $35 billion secured by Prime Minister Narendra Modi during his Japan trip.

Jinping will land in Modi's home state Gujarat on September 17 — the Prime Minister's birthday — following his visit of Tajikistan, Maldives and Sri Lanka.

Confirming this, Liu Youfa, China's consul-general in Mumbai, told, "On a conservative estimate, I can say that we will commit investments of over $100 billion or thrice the investments committed by Japan during our President Xi Jinping's visit next week. These will be made in setting up of industrial parks, modernization of railways, highways, ports, power generation, distribution and transmission, automobiles, manufacturing, food processing and textile industries."

The consul-general's statements coincide with Modi's call for world class infrastructure projects after his review of major infrastructure sectors on Friday. The government also announced new projects worth Rs 9 lakh crore in energy, power, and roads.

China will initially invest $7 billion in industrial parks in Pune and Gandhinagar. "The Pune industrial park — spread across 5 square kilometres with an investment of $5 billion — will be for automobiles that will employ one lakh people and manufacture 1.5 lakh speciality vehicles. The Gujarat industrial park will be for manufacturing power equipment. China is also working on setting up an industrial park in Tamil Nadu for the textile sector and another one for the food processing sector," said Liu.

Chinese investments in industrial parks are just the tip of the iceberg as Chinese firms are eyeing over $50 billion worth of investments in modernization of the Indian railways and running bullet and hi-speed trains in India. Modi on Friday said that the railways have been granted clearance for 100% FDI, and therefore it should come up with a comprehensive plan for facilitating FDI in the sector.

"The first bullet train project was given to Japan, which was a government decision. We are optimistic of building India's next bullet train in India. Besides bullet trains, we want to connect the cities with high-speed trains with speed of 160 km/hr. We will also look at modernization projects of Indian Railways across the country," said Liu.

China is willing to invest another $50 billion in roads, ports and the NDA government's ambitious river-linking plan. "India has over 600 reservoirs that need dredging work to provide better irrigation systems for the farmers. We are looking to work on that. Besides, our major thrust will be on construction of roads and ports," said Liu.

On Friday, road transport and highways minister Nitin Gadkari announced the launch of new roads and highways projects this year worth Rs 2 lakh crore.

Power minister Piyush Goyal said that $100 billion of investments are likely to flow into India's renewable sector in the next four years. Oil minister Dharmendra Pradhan, while meeting Odisha chief minister Naveen Patnaik, said that Odisha alone will receive about Rs 1 lakh crore worth of investment in the next five years in petrochemicals, oil & gas pipelines, LNG & LPG terminals, and strategic oil reserves to make it the 'energy gateway for eastern India.

The Chinese president is coming with a delegation of over 100 business heads, including those from China Harbour, China Railway Construction Group and Huawei, among others, and will address a business gathering of over 400 Indian CEOs in Delhi. The big four Chinese banks — Bank of China, Industrial & Commercial Bank of China (ICBC), China Construction Bank and the Agriculture Bank of China — are also coming with the delegation to give billions of dollars in loans to Indian infrastructure projects to be done in joint venture with Chinese firms.

"All major JV projects will be funded by Chinese banks. Major corporate houses like Tatas, Infosys, Reliance and Essar have already taken loans from these banks and the funding will only increase," said Liu.

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